CFPB's ‘No-Action Letter’ plan gets mixed reviews

CU groups mostly support the program, while consumer groups worry the CFPB will overstep its authority.

The Consumer Financial Protection Bureau’s plans to expand its no-action letter policy and to establish a regulatory sandbox received mixed reviews:

• Credit unions support the efforts with some reservations;
• Consumer groups strongly opposed the idea; and
• States attorneys general were divided along party lines with 22 Democratic attorneys general blasting the proposal, and seven Republicans saying they supported it.

The CFPB is proposing to streamline the no-action letter application by eliminating several elements it believes are “redundant or unduly burdensome.”

The bureau’s review would be focused on the quality and persuasiveness of the application, particularly on the potential benefits to consumers, the possible risk to consumers, and the extent to which the letter is needed, according to the plan. The bureau said it would be expected to grant or deny an application within 60 days.

A 2016 no-action program required companies to share data about the product or service; the new proposal does not include that requirement.

In addition, the 2016 policy called for a staff recommendation of “no action,” while the revised policy would be issued by CFPB employees who have the power to guarantee that no action be taken.

The agency’s product sandbox would provide financial services companies with similar regulatory relief, but also would provide additional “safe harbors” for a specific period of time.

Source: Credit Union Times

For more information, visit the CFPB website.